Public Goods and Ethnic Divisions

We present a model that links heterogeneity of preferences across ethnic groups in a city to the amount and type of public goods the city supplies. We test the implications of the model with three related data sets: U. S. cities, U. S. metropolitan areas, and U. S. urban counties. Results show that...

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Bibliographic Details
Published in:The Quarterly journal of economics 1999-11, Vol.114 (4), p.1243-1284
Main Authors: Alesina, Alberto, Baqir, Reza, Easterly, William
Format: Article
Language:English
Subjects:
Censuses
Cities
Consumer preferences
Demographic aspects
Economic models
Ethnic groups
Evaluation
Fractions
Government spending
Health care economics
Local government
Metropolitan areas
Minority & ethnic groups
Minority & ethnic violence
Public finance
Public good
Public goods
Regression analysis
Social service
Spending
Studies
Urban areas
White people
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Summary:We present a model that links heterogeneity of preferences across ethnic groups in a city to the amount and type of public goods the city supplies. We test the implications of the model with three related data sets: U. S. cities, U. S. metropolitan areas, and U. S. urban counties. Results show that the shares of spending on productive public goods—education, roads, sewers and trash pickup—in U. S. cities (metro areas/urban counties) are inversely related to the city's (metro area's/county's) ethnic fragmentation, even after controlling for other socioeconomic and demographic determinants. We conclude that ethnic conflict is an important determinant of local public finances.
ISSN:0033-5533
1531-4650
DOI:10.1162/003355399556269